What Are The Basic Development Stages Of A Product?

What is a Product Life Cycle (PLC)?



Do you really know what a product is? Well, a product is anything which is capable of satisfying customers’ needs. Product includes both physical or tangible products (car, type writer, computer, chair) and intangible products or services (health care, banking, insurance).

Definition of a Product Life Cycle



Strings of words mentioned below define what a product life cycle is:



"The stages through which a product develops over time is called Product Life Cycle (PLC)”.



OR



"It is the period of time over which an item is developed, brought to market and eventually removed from the market”.



OR



"The product life cycle is marketing concept that describes the way the revenues from the sale of a product behave over time”.

Stages of a Product Life Cycle



The product life cycle is broken down into four phases:



Introduction

Growth

Maturity

Decline



The Product Life Cycle (PLC) Curve

plc product life cycle curve Product Life Cycle (PLC): Stages, Development & Process



For all products, the life cycle is drawn is the form of a bell shaped curve. The beginning of the curve marks the introduction stage; the slope indicates growth stage; top of the curve signifies maturity; and the graph ends in the decline stage. Product Life Cycle (PLC): Stages, Development & Process

Theory of PLC: Biological Life Cycle Versus Product Life Cycle



The concept of Product Life Cycle is based on biological life cycle. For instance, when a seed is planted (introduction); it begins to pullulate (growth); it shoot out flowers and leaves (maturity); and after a defined period of time, it starts to shrink and eventually die out (decline).



Human beings also pass through the same phases of introduction, growth, maturity and decline in their lives. The same theory applies to a product. When a new product is launched in the market, it starts gaining customers; then it stabilizes and becomes mature; then after some time, it is taken over by the introduction of better and superior competitors therefore, it is withdrawn or harvested from the market.



Stage 1 Marketing Mix Implications



You need to have a fair idea of marketing mix implications for each stage.

Product Products are less in number

Price Some companies keep the price high so as to cover their costs whereas others tend to keep it low so as to attract more early adopters.

Distribution Initially, the distribution is done selectively

Promotion Creation of awareness is the only goal of promotion

Growth



Look how the product is establishing market and making profit in comparison to the competitors.

Maintain focus on the promotion efforts. Notice how slowly or rapidly the product is gaining customers and generating profit.

More retailers will be interested in carrying your product. Remember the goal of growth phase is to increase sales and gain customer preference.



Second Stage

Stage 2 Marketing Mix Implications

Product Improvement of product quality.

Price If the demand of the product is high, price is maintained at high level whereas; if you want to target additional customer segments, reduce the price.

Distribution To intensify distribution, discounts are offered to retailers.

Promotion Improved promotional efforts.

Maturity



You will observe that your product has met market saturation. Eventually, there will be a marked increase in sales and it will become a challenge for the marketing and sales team to maintain the market share as new competitors would be penetrating into the market.

Increase promotional efforts and offer more discount to the retailers in order that they give your more shelf space than competitors. The goal of maturity stage is to extend product life cycle while maintaining market share.



Third Stage

Stage 3 Marketing Mix Implications

Product Product is differentiated from those of competitors

Price Maximum possible reduction in prices to be made

Distribution Retain existing distributors by offering discounts as well as searching for more channels of distribution

Promotion Intensive promotion efforts in order to establish brand loyalty

Decline



Carry out a marketing analysis or a survey to find out how customers perceive the product currently. If the interest and demand is low, think of ways to take the product back to profit making position.

Possible ways could be the creation of new target segment and making modifications in the product. The goal of decline stage is either to maintain the product or discontinue it.



Fourth Stage

Stage 4 Marketing Mix Implications

Product Fewer products left in product line.

Price If the product is to be maintained, the prices are retained. In case of termination, prices are reduced to liquidate inventory.

Distribution Channels are phased out gradually.

Promotion Advertising expenditure reaches a minimum level

Examples of Product Life Cycle (PLC)



Set out below are some suggested examples of products that are currently at different stages of the product life-cycle:

INTRODUCTION



GROWTH



MATURITY



DECLINE

Third generation mobile phones Portable DVD Players Personal Computers Typewriters

E-conferencing Email Faxes

Handwritten letters

All-in-one racing skin-suits Breathable synthetic fabrics Cotton t-shirts Shell Suits

iris-based personal identity cards Smart cards Credit cards

Cheque books



Feisty Ash is the author of this article. To get more information about product development, log on  to www.writeawriting.com.